A capacity assessment is a provincial evaluation of whether a municipality has the ability to fulfill its responsibilities effectively. Provinces may assess municipal capacity when considering requests for expanded powers, when municipalities show signs of governance problems, or as part of broader reviews. Assessments examine financial management, administrative capability, service delivery, infrastructure condition, and governance quality. When capacity is found lacking, provinces may provide support, require improvements, or in extreme cases intervene directly. Capacity concerns arise particularly for small municipalities that may struggle to afford professional staff or maintain diverse expertise needed for complex municipal functions.